Yesterday’s budget didn’t really contain many changes for small business owners. After the large number of tax changes over the last 18 months or so, we should treat that as good news!!
As always with budget speeches, the Chancellor only takes us through the highlights and there are many pages of detail that haven’t yet been absorbed.
The main announcements in the budget that affect small businesses were:
No Change in the VAT registration limit. We can normally rely on this to go up slightly each year. However, in recent weeks there has been talk of drastically reducing the VAT registration threshold, which would put the smallest of businesses into the VAT system.
There was an initial excitement over new extensions to R&D tax credit relief. However, when the small print was checked, the benefit only applies to large businesses, so there’s no good news here.
Contractors in the private sector need to be aware of potential new private sector IR35 rules. New rules were brought in earlier in the year for contracts in the public sector. The Government look as though they are entering a “careful consultation” about private sector contractors with a view to extending the public sector rules into the private sector.
Bad news for drivers of company Diesel cars. Influenced by the National Air Quality Plan published in July, diesel cars that do not meet the Real Driving Emissions Step 2 (RDE2) standards will move up an emissions band. These Vehicle Excise Duty (VED) rate changes apply to vehicles registered from April 2018.
So, no good news in the budget, but not as bad as some had feared beforehand.